Archives : SHORT TERM TARGET ACHIEVED - 24/08/2012.

SHORT TERM TARGET ACHIEVED – 24/08/2012.

TREND INTACT.

Steady uptrend continued this week and as a result the short term pattern target for both Sensex (17986) and Nifty (5460) were almost achieved as Sensex reached a high of 17972 and Nifty 5448 during the week. Last three days formed neutral candlestick formations and as a result the weekly formation has raised doubt regarding the current uptrend. It is absolutely normal for the market to drift lower after reaching a target level which is a minor retracement of the previous rise, which will not affect the overall bullish trend of the market. For the smaller timeframe the retracement levels are at 5289-5240-5191 for the Nifty.

 

 


SHORT TERM TARGET ACHIEVED – 24/08/2012.

TREND INTACT.

Steady uptrend continued this week and as a result the short term pattern target for both Sensex (17986) and Nifty (5460) were almost achieved as Sensex reached a high of 17972 and Nifty 5448 during the week. Last three days formed neutral candlestick formations and as a result the weekly formation has raised doubt regarding the current uptrend. It is absolutely normal for the market to drift lower after reaching a target level which is a minor retracement of the previous rise, which will not affect the overall bullish trend of the market. For the smaller timeframe the retracement levels are at 5289-5240-5191 for the Nifty.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17705, made a high of 17972, low of 17705 and closed the week at 17783. Thus it registered a weekly gain of 92 points. At the same time the Nifty opened the week at 5368, made a high of 5448, low of 5368 and closed the week at 5386. Thus the Nifty went up by 20 points on a weekly basis.

After three weeks of white candle formations, this week too has formed a white body formation. But this week the candle has a small body and a long upper shadow which is a Shooting Star formation which is a Bearish Reversal pattern. A Bearish Reversal will be confirmed if a black body is formed on the next weeks chart. On the daily charts Sensex has formed a Doji on Friday and Nifty has formed a small body neutral candlestick formation. Both the indices have formed neutral formations in the last three days and hence a big body candle will determine further direction of the indices in the short term.

Market has left behind a Bullish Gap not only on the daily charts but also on the weekly charts. Thus Weekly Bullish Gap between Sensex 17291-17313 and Nifty 5246-5260 will provide support to the indices whenever they correct. This support is also ably aided by the presence of the medium term average of 50dma which also lies in its vicinity.

Both the Sensex and Nifty have almost achieved their targets as per the short term Bullish Head and Shoulders pattern. The targets as per the formation were at Sensex 17986 and Nifty 5460 and this week the Sensex reached a high of 17972 and Nifty 5448. On the weekly charts both Sensex and Nifty have formed a Bullish Diamond pattern and the target as per this formation is Sensex 20171 and Nifty 6192. The targets will be achieved as long as the market stays above Sensex 15748 and Nifty 4770.

Both Sensex and Nifty are above 17631 and 5348 respectively and hence from a long term perspective, we can say that both Sensex and Nifty have resumed the pull-back of the entire fall from Sensex 21108 to 15135 and Nifty from 6338 to 4531. The pull-back levels are 17417-18122-18827 for the Sensex and 5221-5434-5648 for the Nifty.

On an immediate basis if the indices continue to drift lower then one needs to consider retracement of the short term rise from Sensex 16598 to 17972 and Nifty from 5032 to 5448. The retracement levels are at 17447-17285-17123 for the Sensex and 5289-5240-5191 for the Nifty.

A Support zone has been formed between Sensex 17471-17447 and Nifty 5294-5289 because there is a confluence of the supports like the previous intermittent bottom (Sensex 17471 and Nifty 5294) and 38.2% level of the immediate rise from Sensex 16598 to 17972 and Nifty from 5032 to 5448.

This week both Sensex and Nifty have continued to remain above the long term average of 200dma (Sensex – 16906 and Nifty – 5115), medium term average of 50dma (Sensex – 17267 and Nifty – 5237) and short term average of 20dma (Sensex – 17467 and Nifty – 5297) and have also closed well above these levels. As a result the trend in the long term, medium term and short term timeframe continue to be all Bullish.

Market is now well above the level of the Falling Channel Top which comes in at Sensex 15758 and Nifty 4774. These levels should now provide Support for the market. The overall bullish long term target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

MACD and ROC continue with their Buy signal while remaining positive. RSI has continues to remain higher at 63 and is indicating bullish momentum. Stochastic Oscillator %K continues to remain overbought at 86 but is in Sell mode as %K is below %D. MFI continues to move higher in Buy mode and is at 72. The Directional Indicators continue in Buy mode as +DI is above –DI. ADX has improved and is at 23 which suggest that a trend is now underway. OBV is showing sideways movement.

The Nifty O.I. PCR has increased and suggests bullishness and is at 1.89. For the September series, highest open interest buildup is seen at 5200 Put and 5700 Call. This suggests an overall range of 5200 on the lower side and 5700 on the higher side for the next month series. 5300 strike has seen strong Put writing on Friday which suggests that the market is likely to take support near those levels in the short term.

Trendline Resistance for the Sensex is at 18013. The Trendline Support for the Sensex is at 17040.

Trendline Resistance for the Nifty is at 5442. The Trendline Support for the Nifty falls at 5166.

For the week ahead, Sensex will find Support at 17489-17208-16920 and will find Resistance at 18040-18289-18523.

For the week ahead, Nifty will find Support at 5306-5220-5135 and will find Resistance at 5461-5542-5629.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5135

5220

5306

5386

5461

5542

5629

Sensex

16920

17208

17489

17783

18040

18289

18523

LAST WEEKS RECOMMENDATIONS:

Majority of the recommendations did well except for Tata Chemicals and Aban. But the star performer of the week was Tata Motors which went up by around 4%. 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

TatChem

316

322

319

1000

Rs. 3,000

Buy Aban

421

432

429

500

Rs. 4,000

Buy TatMtr

240

246

250

1000

Rs.10,000

Videocon

176

180

181

2000

Rs.10,000

Buy IDFC

140

145

146

2000

Rs.12,000

Total

Rs.39,000

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy CoalInd

367

361

376

386

Buy STFC

613

604

628

644

Buy HindOil

125

123

129

134

Buy Ranbaxy

551

541

566

582

Buy Cairn

342

338

350

359

  WATCH OUT FOR:

Coal Ind

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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